Should You Invest in Ethereum?

By Howard Sherman on November 22, 2017

Vitalik Buterin co-creator of Ethereum

Should you invest in Ethereum?

Consider this; Bitcoin has many clones and competitors. On the playing field of cryptocurrency there is one clear second-place winner; Ethereum. What is Ehtereum? Ehtereum itself is a global computer network with its own virtual currency called Ether. Vitalik Buterin was a fan of Bitcoin before he created the Ethereum network and Ether. With a market price of $365 (compared to Bitcoin’s $8200) it’s an affordable and tempting alternative when it comes to cryptocoin investing. Should you invest in Ethereum just because it’s cheaper?

Yes. Since a picture is worth a thousand words here’s why….

The Price of Ethereum as of November 22nd 9:20 AM PST

What is Ethereum?

Ethereum is a global computing network operating according to rules defined by Ethereum software.

Those rules allow the Ethereum network to be programmed to complete specific computing tasks with every computer processing Ethereum tasks completing any given task in parallel to ensure it is done correctly. Generally the tasks involve money.

Vitalik Buterin has likened Ethereum to a global smartphone that can run “apps” called Dapps because they are run by a decentralized network of computers. (Side note — Many SAFTs are using leveraging the Dapp model with their own coin offerings.)

Vitalik chose Ethereum as the name of this new network as a reference to the ethereal, something that is seemingly there but not tangible. While he announced his intentions in 2013, Ethereum didn’t come into existence until 2015.

The Ethereum network has its own virtual currency, Ether.However, most cryptocurrency exchanges and indexes refer to the name of its parent Ethereum to eliminate ambiguity. Ether coins are needed to compensate the computers running on the network to complete the tass that are out there.

People have also decided to buy and hold Ether, betting that it will become more valuable as more people want to use the network and need Ether to pay for the network’s computing power. With the value of Ether rising steadily the answer to the question Should you invest in Ethereum? Most definitely.

Bitcoin and Ethereum: Kissing Cousins in the Cryptocoin World.

Vitalik was a Bitcoin fan and was impressed with everything he saw. In the spirit of capitalism itself he set out to build something that could do more than Bitcoin: He wanted to build a system that could accommodate more complex financial transactions.

The shared records of the Ethereum network — of every transaction and computation it has ever performed — are known as a blockchain, just as the shared records of all Bitcoin transactions are known as a blockchain. But Ethereum’s blockchain database is totally independent of Bitcoin’s blockchain. (Side note — we’re going to take a very deep dive into blockchain itself in a future article.)

Large companies are turning to Ethereum to track supply-chain transactions. Now very much on the world stage and used by multinational corporate giants, the rising price of Ether makes sense. Any Ethereum investor who simply buys and holds Ether just as they would Bitcoin are speculating that more and more corporations will turn to Ethereum to solve sophisticated accounting nightmares and those plugged into the Ethereum network are being paid handsomely – and in higher amounts – to complete these tasks.

How do you buy Ether?

Just as with Bitcoin, you can buy Ether from people who already own them on virtual currency exchanges. Most large countries have exchanges where a variety of virtual currencies can be bought with the local currency. Coinbase, based in San Francisco, is one such place you can buy and sell Ethereum as well Bitcoin and Litecoin. In fact you can buy and sell the different cryptocoins and often trade one for the other. Some investors ride this wave and track all three of them and jump in and out as market prices change. Some cryptocoin investors ended up making a lot of money in Bitcoin AFTER taking the profits they made on Ethereum.

Should you invest in Ethereum? Heck yeah!

How are Ether created?

Just as with Bitcoin, Ethereum are “mined,” or created by computers joined into the Ethereum network. In the not too distant past CPU power was (that is to say raw computing power) was sufficient to mine Ether now GPUs (think: graphics cards) are now required to make mining Ether make any economic sense. This has turned into a the computing equivalent of an arms race as the fastest Ether miner rigs make more money faster. .

As with Bitcoin, Ethereum mining serves a dual process of getting new Ether on the market while providing a profit motive for people to join the network and help maintain the Ethereum blockchain.

Should you invest in Ethereum? Hell yes!

With millions of coins still to be mined and then the finite number of those coins positioned to only go up in value investing in Ethereum is something to be considered.